Shocked that companies and mutual funds would invest OPM (Other People's Money) in high-risk investments, the Shocked Investor was originally on a mission to find out if our money ended up in these dubious instruments. This blog now also discusses other financial topics, such as straddles, options, gold, natural gas, agri/food stocks, and the collapse of the US Dollar.

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Tuesday, November 30, 2010

So now the fun has started with Spain, which is really as Roubini says, "the big elephant in the room (there is not enough money to bailout Spain)".

Bloomberg reports today that Spain’s banks will have to refinance about 85B euros next year, and that will be struggle as costs are surging.
They report analysts saying there is "universal dumping of Spain going on,”

The average yield investors demand to hold euro-denominated Spanish bank bonds jumped by the biggest monthly jump on record, rising 141 basis points to 385 basis points in November.
"Spanish lenders are paying the highest premium ever on their debt relative to other banks in Europe.
Spain says the government’s finances and the country’s banks are sound".

So said Ireland, and all the banks passed their "stress tests" too.

"Spanish banks had loans from the ECB of 67.9 billion euros in October, a 30 percent drop from the previous month. Spanish ECB loans as a proportion of banking assets stand at about 2 percent, compared with about 7.8 percent for Ireland".